Marketing Flashcards
Why do businesses do market research ?
To find out what customers want ( product, place price and promotion ) and what their competitors are doing
What are the two types of market research (2)
- desk
- field
What are the advantages of field research (3)
- up to date
- specific to your organisation
- choose target for research
Disadvantages of field research
- time consuming
- expensive
What are the advantages of desk research
- time effective
- cost effective
What are the disadvantages of desk research?
- can’t guarantee it’s reliable
- might not be up to date
What does the marketing mix consist of?
- product
- place
- promotion
- price
Product development (6)
- market research carried out
- ideas for product based on market research
- model created
- hall tests carried out and feed back given
- changes made based on testing
- method of production chosen
methods of field research (4)
- survey (online, telephone, paper)
- personal interview
- hall test
- focus group
what are the stages of the product life cycle (4)
- product development
- growth
- maturity
- decline
what are the advantages of product branding? (4)
- higher prices can be charged therefore they would generate a higher profit
- people trust the brand so new products can be easily introduced
- encourages repeat customers
- makes business more recognisable so the company will not need to advertise as much
what are the disadvantages of product branding? (3)
- in one product gets a bad reputation it can affect all products
- some business will copy your brand increasing competition
- establishing a brand is time consuming and expensive
what factors should a business consider when setting a price ?(6)
- cost (employees, raw materials etc)
- competitions pricing
- demand
- profit expectations
- image company wants to portray
- product availability
what are the pricing strategies (6)
- premium pricing
- competitive pricing
- destroyer pricing
- cost plus pricing
- price skimming
- penetration pricing
what is premium pricing ?
when a business makes the price for their product high to make they’re product seem more desireable
what is competitive pricing?
this is when a business sets its price equal to competitors
what is penetration pricing?
when a business starts it’s prices low to attract customers and gradually increases them
what is price discrimination?
this is when a business sets similar goods at different prices
what is destroyer pricing?
this is the illegal act of a business setting their prices so low it puts competitors out of business
what is cost plus pricing?
this is when a business calculates how much it will cost to make the product then add the % the aim to make onto it
what is price skimming
this is when a business sets their prices originally high and gradually lowers them
what is demand pricing
this is when a business raises prices when the product is higher in demand and vide versa
what is promotional pricing?
short term reductions to entice sales
what factors are involved in where you place your business?(9)
- employee availability
- close to customer
- local community
- environmental impacts
- product image
- suitable infrastructure
- availability of suitable premises
- competition location
Stages of the product life cycle (4)
- introduction
- growth
- maturity
- decline
What are the advantage of product branding? (4)
- higher prices can be charged and therefore generate a higher profit
- new products easily introduced as people already trust the brand
- encourages repeat customers
- not need to advertise as much
What are the disadvantages of branding?(3)
- if one product gets a bad reputation it effects all
- some businesses will copy your brand, increasing competition
- establishing a brand is time consuming and expensive
Factors to consider when the business sets its price (6)
- cost ( employees, raw materials etc)
- competitions pricing
- demand and supply
- profit expectations
- image company wants to give
- product availability
What are the different pricing strategies business could use?(8)
- premium pricing
- competitive pricing
- penetration pricing
- destroyer pricing
- loss leaders
- cost plus pricing
- demand pricing
- promotional pricing
What premium pricing?
This is when a business puts its prices high to make the product seem more desirable
What is competitive pricing?
Setting the price of good or service equal to competition pricing
What is penetration pricing?
Setting a low initial price to attract customers then gradually rising them
What is destroyer pricing?
Illegal practice of setting prices so low it puts competition out of business
What is a loss leader pricing strategy?
Pricing below market price to stimulate other goods and services
What is cost plus pricing?
Add up all costs involved in making a product then add the percentage of profit they want to make on
Price skimming
Setting the prices high then gradually lowering
What is demand pricing?
Setting higher prices when the product is in demand and vice versa
What is promotional pricing
Short term reduction on price to entice sales
What should you consider when deciding where to place your business?
- be close to your customer
- employee availability
- government incentives
- environmental impacts
- local community
- suitable infrastructure
- product image
- availability of suitable premises
- competition
How does being close to your customer effect the business?
If a business is close to the customer they will not have to travel very far, therefore increasing customer satisfaction
How does employee availability effect where the business is situated?
The business wants to be in a place where there are employees available with the right skills so the business can do its best
Hood government incentives effect where a business is situated?
If the government wants a business to bring jobs to a certain place, they often offer the business money to set up there
How do environmental impacts effect where the business is situated?
If the place the business wants to set up is environmental, the business can not open encase wildlife is damaged
How does the local community effect where the business sets up?
If the local community complains/ petitions negatively about a business, this could have it closed down
How does having suitable infest-structure effect where the business situates ?
The inside of the building needs to have a suitable layout to meet requirements. This avoids more money being spent on altering the building
How does product image effect where the business is situated?
If a shop located in an upmarket street, the customer may assume the products are better quality and therefore more desirable
How does the availability of suitable premises effect where the business situates?
The capacity of the businesses premises needs to be the right size to function properly
How does competition effect where the business situated?
Need to make sure the business is set up where there are no competitors
What are the methods of distribution?
- road
- rail
- air
- sail
What are the advantages (2) and disadvantages (2) of using road as a method distribution
Advantages - quicker for short distance - easy to park close to business Disadvantages -traffic issues - can’t transport major capacity of goods
What are the advantages (2) and disadvantages (2) of using Air as a method of distribution?
Advantages - quickest long distance transport - not just land based Disadvantages - expensive - need to use other methods of distribution to get to final place
What are the advantages (2) and disadvantages (2) of rail as a method of distribution
Advantage -Little congestion/ obstruction - increased capacity Disadvantage -still have to use road to final distribution - only land based
What are the advantages (2) and disadvantages (2) of sail as a method of distribution
Advantages - massive capacity - good for long distance Disadvantages -slow - weather dependant
What are the methods of advertising (6)
- TV adverts
- outdoor media
- magazines
- online adverts
- celebrity endorsement
- cinema adverts
What are Tv adverts? ( description, advantage and disadvantage)
Description - moving image with sound and colour
Advantage- source of entertainment
Disadvantage - can be skipped / ignored
What is outdoor media?( description, advantage and disadvantage)
Description- any advert in public
Advantage - targets a range of people
Disadvantage- can get ignored and people get used to them
What is a magazine advertisement ( description, advantage and disadvantage)
Description- colourful picture/ bold writing
Advantage- permanent
Disadvantage- can be ignored
Online adverts (Description, advantage and disadvantage)
Description- flashy tones and bold colours/text
Advantage- permanent feature
Disadvantage - expensive
Celebrity endorsement ( description, advantage and disadvantage)
Description - when celeb promotes a brand or product
Advantage- people look up to celebs
Disadvantage - expensive
Cinema adverts ( description, advantage and disadvantage)
Description - movie colourful picture
Advantage- can’t escape watching
Disadvantage - can be ignored
What are the different things businesses can offer peoples a method of promotion? (6)
- free samples
- demonstrations
- buy one get one free
- student discounts
- free delivery
- free offers
How can a business be ethical?(4)
- any claim a business makes has to be backed up by evidence
- not physically or digitally editing a product
- no hidden fees
- free trials easy to cancel
- not making terms and conditions complicated
What is market segmentation
Instead of trying to serve all customers equally, a business will focus on different parts of the market
How can the market be segmented ?(7)
- age
- gender
- job
- income
- life style
- religious beliefs
- location
Why does a business use market segmentation ?
- allows the business to make a product more aligned to a group of people to raise sales
- narrows down market research to benefit your results
- allows business to tailor price appropriately
- decide an appropriate place to sell product
What are the methods of field research?(5)
- interview
- hall test
- online survey
- focus group
- postal survey
What is an advantage and disadvantage of an interview as a method of market research
Advantage- interviewer can ask person to clarify a point
Disadvantage - interview can only target o e person at a time
